Revisiting the palm oil boom: An examination of consumption in the oils complex
The production, trade, and market share of palm oil has shown impressive growth in the last two decades. As a result of sustainability concerns over issues such as deforestation in Indonesia, the causes of the growth in the palm oil market have received considerable attention. The growth of the biofuels market is one potential culprit that has been notably discussed, but it is not the only possible driver of growth in the palm oil market. Restrictions on genetically-modified organisms may have played a role, especially as they relate to limits on oil produced from GMO soybeans. Additionally, increasing concerns over health issues such as trans-fats may have spurred substitution to the low trans-fats palm oil. This analysis details some of the changes in net imports, market shares, and world prices that the edible oil complex has undergone. Additionally, a vector-error correction model and Granger causality are applied to the prices of the edible oils. The differences in causality across the oils in the complex suggest that the drivers of change may be more multi-dimensional than expected.
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- Yu, Tun-Hsiang (Edward) & Bessler, David A. & Fuller, Stephen W., 2006. "Cointegration and Causality Analysis of World Vegetable Oil and Crude Oil Prices," 2006 Annual meeting, July 23-26, Long Beach, CA 21439, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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Agricultural and Applied Economics Association, vol. 91(5), pages 1424-1431.
- Holt, Matthew T. & Balagtas, Joseph V., 2009. "Estimating Structural Change with Smooth Transition Regressions: an Application to Meat Demand," MPRA Paper 15331, University Library of Munich, Germany.
- Kelvin Balcombe & George Rapsomanikis, 2008. "Bayesian Estimation and Selection of Nonlinear Vector Error Correction Models: The Case of the Sugar-Ethanol-Oil Nexus in Brazil," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 658-668. Full references (including those not matched with items on IDEAS)
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